Stocks wavered Friday after President Donald Trump threw cold water on recent U.S.-China trade optimism by saying he has not agreed to roll back existing tariffs.
The Dow was down 30 points, while the S&P 500 and Nasdaq turned slightly higher in afternoon trading.
Trump made his comment Friday, noting Beijing would like him to scrap those levies. Those comments came after trade optimism earlier in the week sparked a massive rotation out of bonds and lifted equities to record levels.
Entering Friday’s session, the Dow is up 1.2% week to date. The S&P 500 and Nasdaq are both up 0.6% for the week through Thursday’s close. It would be the third straight week of gains for the Dow while the S&P 500 headed for its fifth straight weekly gain. The Nasdaq was on pace for a six-week winning streak.
A spokesperson for the Chinese Commerce Ministry said Thursday that China and the U.S. had agreed to cancel existing tariffs in phases. A U.S. official also said reportedly both sides agreed to roll back the levies in tranches.
“The trade narrative seems to be inching closer to some form of a ‘phase 1 agreement’ based on the recent flow of headlines,” said Michael Schumacher, global head of rate strategy at Wells Fargo Securities, in a note. “We have all seen this movie before, so we are not ready to call it a done deal.”
Meanwhile, Jean-Claude Juncker, president of the European Commission, said there “won’t be any auto tariffs” from the U.S. on Europe next week. U.S. President Donald Trump has until Nov. 13 to decide whether he will pursue with car tariffs on the EU.
The risk-on sentiment from earlier in the week took a big bite out bonds. The U.S. 10-year Treasury yield jumped more than 15 basis points at one point on Thursday, its biggest upward move since the 2016 election.
Sentiment was also boosted this week by corporate earnings results that have generally beaten expectations. Of the 425 S&P 500 companies that have reported thus far, 74% have beaten estimates, according to FactSet.
Most recently, Disney posted better-than-forecast quarterly numbers, sending the stock up about 4%. Disney’s revenues for its media and networks segment topped a FactSet estimate, while sales for the company’s parks, studio entertainment and direct-to-consumer businesses also beat expectations. The stock also got a lift from increasing enthusiasm around next week’s launch of Disney+.
On the data front, consumer sentiment figures are due out at 10 a.m. ET, as well as wholesale trade numbers.
CNBC’s Silvia Amaro contributed to this report.